Challenges faced by MFIs in adopting management information systems during their growth phase: the case of Togo

01.06.2016
The growing urgency to achieve financial sustainability has led some microfinance institutions (MFIs) in Africa to invest in management information system (MIS). These systems offer the potential to reduce transactions costs and increase efficiency. However, we know little about the opportunities and the difficulties faced by MFIs during their growth phase to adopt and manage MIS. The paper examines qualitative and quantitative data on the capacity of MFIs in Togo to effectively implement MIS. Results suggest that MFIs face various difficulties resulting from insufficient support from MIS designers; limited network data consolidation; irregular system updates that disturb the proper functioning of the system; and difficulties to manage data in accordance with the legal framework and instability of the system. We find also that if the MIS responds appropriately to the need for MFIs information processing, the result is a better outcome in terms of operating cost reduction, portfolio risk reduction, and operating profit. Findings suggest that full involvement of the Professional Association of MFIs in Togo is recommended to centralize and share the information system problems faced in the entire sector microfinance in Togo. This can be done through the organization of training workshops.